At present, it’s tricky to make Windows PCs that cost as little as basic Android tablets and Chromebooks. According to Bloomberg, Microsoft is reportedly cutting Windows 8.1 license costs by 70 percent for PC makers. Microsoft is cutting Windows 8.1’s license fee to $15 for any device that sells for less than $250, letting builders offer very cheap Windows PCs without destroying their profits.

Declining shipments & slower rate of adoption

Microsoft had been considering making Windows Phone and Windows RT available free of charge to device makers, and it appears the lowering of Windows 8.1 license fees for low-cost devices is the first step towards this possible plan. While Microsoft has sold more than 200 million licenses of Windows 8 since it was first released in October 2012, the growth rate is slower than Windows 7. This is largely related to a PC market slowdown, and competition from rival low-cost tablets and devices.

Windows 8 has had a mixed reception from consumers, and any licensing change is a clear move to prevent additional PC makers opting for Chrome OS on their low-cost laptops. During the early days of netbooks, Microsoft saw the threat from low-cost Linux-based machines and slashed Windows XP’s pricing to wipe out Linux netbooks. There’s no guarantee that the company will repeat its earlier success if the lower Windows 8.1 prices take effect. However one thing is clear that the Android and Chrome based devices are seriously making a dent in Redmond’s business.